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Bradford Company derived the following cost relationship from a regression analysis of its monthly manufacturing overhead cost: C = $80,000 + $12M where: C =
Bradford Company derived the following cost relationship from a regression analysis of its monthly manufacturing overhead cost: | |||||||||||||||||||||||||
C = $80,000 + $12M | |||||||||||||||||||||||||
where: | |||||||||||||||||||||||||
C = monthly manufacturing overhead cost, and | |||||||||||||||||||||||||
M = machine hours | |||||||||||||||||||||||||
The standard error of estimate of the regression is $6,000 The standard time required to manufacture one six-unit case of Bradford's single product is two machine hours Bradford applies manufacturing overhead to production on the basis of machine hours, and its normal annual production is 50,000 cases | |||||||||||||||||||||||||
Bradford's estimated variable manufacturing overhead cost for a month in which scheduled production is 5,000 cases would be:
|
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